401k rollover to checkbook IRA LLC?

[Tom States]

My game plan was to rollover my 401k to a checkbook IRA LLC. But the mortgage company wanted to close fast on a short sale before I could set up the LLC, so I had to rollover my 401k to a traditional IRA and take a distribution (and pay taxes & penalties) for the downpayment. Now I own the property but have to pay off the loan in 12 months. My plan is to set up the LLC & pay off the balance (as well as rehab expenses) through the LLC. But I know I can't do business with myself. Is it possible for me to transfer title in the house to a friend's LLC, and then have my LLC buy it back 6 months from now? Anybody know if this is legal, or of another means of getting ownership of the property to my LLC instead of myself? Obviously I can't continue tapping my IRA for distributions and paying taxes & penalties each time.

[Brian Eastman]

@Tom States 

Dimitri is correct. I would chip in by stating that there is absolutely 100% no way you can salvage this transaction with IRA funds in your name. Any workaround that you may possibly come up will result in a prohibited transaction. The fact that you are currently on title in your own name makes this property toxic poison to your IRA.

Time to start working on a different exit strategy and see if you can find a way to dish this property off to another investor.

Sorry.